When and how to find a good property manager?

Question

Elizabeth Colegrove · Answer

@Ahmad Hijazi

I have all my tenants do direct deposit. This way I don't have to collect rent. At 900+ a door I think your tenants are high enough class to expect this. I set up a bank account for each house and keep very little money in the account. So it's not like they are able to get at any money.

I also don't include any landscaping or snow removal in my leases. I have single family but this makes my life so much easier. While all of my tenants have my phone number, most email or text me. As I tell them that is my preferred method.

I also have a 13 page lease where I outline all expectations. I spend time sometimes almost an hour going through the lease to make sure everyone understand what they are expected to do. This really makes my life alot easier.

I don't have a manager for many reasons. The two biggest are control and money. Since I also work full time and am not local, I have had to find a way to be able to do everything. My answer has been efficiency. Therefore I have learned to get my process down, so everything is simplier, easier adn done only once. I also have set expectations so I do very as little with tenant interaction because there are no issues.

Account Closed · Answer

Hi Ahmad,

Great question! Here are 25 important questions we recommend you ask any property management company you are screening.  I personally had a horrible experience with 3 different management companies which led me to start my own company.

http://www.jmbgrouppm.com/blog/item/23-questions-to-ask-a-property-manager.html

Paul Timmins · Answer

@Ahmad Hijazi

Go to IREM.org search for ARM certified property managers. Call 5 ask them what sides of the city they like/dislike and why. Ask what they see them selling for and what expenses are by category. Ask if they know anything coming up for sale. Great way to get off market deals and locate a PM you are comfortable with.

Paul

Joel Owens · Answer

There Is a place called www.irem.org to check out people in your area that have at least gone through some management training. You still need to perform due diligence on them.

Just be careful building a portfolio of scattered buildings all over the place. I hear from investors often of nightmares buying small properties and having 4 different PM's because of different locations. It's a lot logistically to manage. You still have to "manage the manager".

The problem with the smaller properties is the agents tend to sell stuff on the side and do management more as a hobby. For the large PM companies these properties tend to be too small to add to their portfolio's for managing. So what you are left with is a pot luck of playing the lotto to land a decent PM.

As your time gets busier which is what my clients deal with that make high incomes you look to larger investments that have scale or more hands off investments. If your properties are all close by you might land a larger PM company for a package deal.

Lynn McGeein · Answer

I don't think you are too small for a property manager as many out-of-state people, like me, had to start by finding one for one property only, and they are used to that.  As far as putting them all under management or just a few at first, that would depend on your comfort level.   If you are able to handle some of them a while longer without going crazy, maybe start with one building under management, see if it's what you want as far as lightening your load (it's been my experience that if you don't find a good one, which you won't actually know until issues arise, managing the manager can be as taxing as just calling repairmen yourself), then negotiate to add the others later.   The main issues I found as I was used to being hands on are that it takes a while to work owner payments through their system so we don't get paid until the 12th or so (and don't know if any rents are late until then usually), and it's very frustrating when they send a repairman out to fix an appliance for $100, then next month send you another bill for $125 for the same appliance, different problem, as it's getting older and common sense would tell them to call and ask if I just want it replaced instead, but it's under the limit so they don't call to ask.   Little repairs are also more expensive due to handyman fees, but being out of state now, there's not much we can do about that.

Jonathan K. · Answer

Still working on my first multi-family purchase. However, in the apartment building I used to live in (Hoboken), the property manager was a tenant living in the building. He had a day job elsewhere; I'm guessing he got a break of some kind on his rent but am not sure. It was a five story, 10-unit walk-up. Based upon what you've detailed above in terms of your needs, that's the kind of stuff our guy did.

Ahmad H. · Answer

@Kris Taylor All the properties I have and will be buying are local so I would still be the one screening and selecting tenants. I would also be involved in deciding on repair items >$150 as I can swing by and see what is going on.I am willing to do 10% of gross rents, the average rent per door is $900+. and there are 5 doors total. I guess the services that I want taken care off are collecting rents, landscaping, making sure trash and snow removal is taken care off, and someone to be interfacing with the tenants for minor issues like a clogged sink or burnt light bulb. Are my expectations reasonable?

Any input about when to start looking, am I too small now to reach out for a property manager?

@Jonathan K.

I will look into electronic payments to make rent collection easier but I am not sure about having one of the tenants become a property manager. Do you have a tenant/property manager for each property or one for all and what is their compensation?

@Lynn M.

There is a lot of great info about screening property management companies and I will definitely be leveraging that in my search.

Lynn McGeein · Answer

You may have already done this, but if you search this site's blogs for "property manager" or other pertinent keywords, I know there are some very valuable ones with great information, and I think there's even a checklist on questions you should be asking.  I had a lot of issues finding decent property management, but there are good companies out there.   And remember to read their management contracts very thoroughly (they'll usually email them to you if you ask).  I found all kinds of weird stuff, added services, tucked in many of their contracts, even the ones who sounded very good during the earlier stages of research.

Jonathan K. · Answer

@Ahmad Hijazi

You should look into technological alternatives for the rent collection piece. There are online platforms that help you do this. Or you can have a tenant deposit rent into your bank account.

As for your property manager, this isn't going to be his/her full-time job with two MF properties. So then you're looking at people who are either trying to get back into the workforce or looking to scale back with limited hours and lots of flexibility. Definitely agree with @Kris Taylor getting your priority list organized. At the root of it, you're looking for someone who has the ability and willingness to do a good job, which includes being a good decision maker on the smaller, more frequent issues and saving you money in the process.

My best suggestion: You may want to look at your existing tenants to see if any of them have the skill set you're looking for. At least you'd know that they were onsite at one of your properties at all times.

Kris Taylor · Answer

I would start with an outline of exactly what you are looking for (what services are most important) and how much you are willing to pay. These decisions will be critical in finding the right person/company for the job.

When and how to find a good property manager?

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